How can I merge these selected faces?
You should delete them and create nice geometry by bridging the edge loops instead(Ctrl+E -> L):



This way you will avoid possible shading errors with automatic triangulation of concave n-gons. You can then select the face loop by Ctrl+ click, or select one face and hit Shift+G->C for selecting Co-planar faces, or you could use select linked flat faces function:



You could assign a shortcut to that by rightclicking it and choosing assign shortcut.